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May 16, 2005

Why Wait for WiMax?

By Nancy Gohring

I wrote a story recently for Wireless Week and heard some very interesting comments from a major European operator: The mobile operator, which asked not to be named, is conducting a trial of IPWireless gear in Europe. The operator is interested in IPWireless as a fixed broadband solution, not for its mobile capabilities. The operator is already working on 3G and doesn’t really see why it would introduce a separate network like IPWireless, especially since the demand for 3G services isn’t even clear. The market for fixed broadband is very clear though so it makes more sense to target that space.

Also, the spokesperson said that having a broadband fixed network could allow the operator to enable customers to completely do away with their landlines. A lot of customers keep their landline phones only because they are required to in order to get a decent DSL rate. Those customers could fully rely on their mobile phones for voice telephony and use the IPWireless network for broadband access.

The operator has also looked closely at WiMax and while it could be an option in the future, he noted that IPWireless is available today. What WiMax promises to deliver in 2007, IPWireless offers today, he said. The operator doesn’t want to wait until then. It could migrate to WiMax down the road if it becomes a much less expensive option, but the spokesperson doesn’t expect that it will. Or, the operator could begin offering access to the IPWireless network on a mobile basis, building a WiMax network to replace the fixed service.

His comments made me think that the vendors like IPWireless and Flarion might pose more of a threat to WiMax than the WiMax camp might perceive. This is a pretty significant European mobile operator I spoke with and if that’s how his company feels about WiMax, others might too. If the vendors like IPWireless and Flarion manage to attract enough customers, the price of their equipment will drop, just like the price of WiMax equipment will drop with volume. The operators may gamble on which equipment will drop faster.